One of the Federal Reserve Chairman’s most, ahem, “enviable” tasks is the semi-annual appearance before Congress. I often wonder if Fed Chairs feel a little like prisoners being led to the gallows as they trek across town … take a seat before the Senate and House Banking Committees … and opine about the state of the economy, inflation, interest rate policy, and more.

The questions that follow from various Congressmen and women tell you as much as about the political climate as they do about the economy. Oftentimes, these people just want to score a few political points by bashing the Fed or talking up their pet tax and spending projects, rather than actually learn something.

The testimony the Fed Chair delivers to Congress can lead to sizable moves in stocks, currencies, and commodities.

But the prepared testimony the Fed Chair delivers first … and some of the answers that follow … can provide useful information to investors like us. They can also lead to sizable moves in everything from stocks to currencies to commodities, so that’s why I pay attention.With that in mind, what did Yellen have to say today?

First, she said in her prepared testimony the U.S. economy looks to be in pretty good shape! She noted the fall in unemployment to 5.7 percent from 10 percent during the Great Recession … the increase in the monthly pace of job creation to 280,000 at the end of 2014 … and the rise in real GDP growth to a recent pace of more than 3 percent. While she did talk about lackluster housing-related spending, she didn’t sound too concerned.

Second, she talked about how interest rates have generally declined despite the improvement in the U.S. economy, and discussed how oil prices have done the same. Her stated causes: “disappointing foreign growth and changes in monetary policy abroad” when it comes to rates, and “increased global supply” when it comes to crude.

Finally, she said that inflation has remained subdued and that not all of that stemmed from lower energy prices. She concluded that the Fed would maintain a “high degree of policy accommodation” as a result, but that the Fed continues to believe that the economy will improve, and that such improvement will require the funds rate to be adjusted before too long.

“The Fed has repeatedly done the wrong thing over the last several years when it comes to policy.”

So what do these latest comments from Yellen mean for the markets?

Well, my personal view is that the Fed should have already raised rates at least once. Failing that, they should do so very soon this year — as early as April. Nothing in today’s comments suggests the Fed is worried about an economic relapse, so the rationale for crisis-era monetary policy is completely lacking.

But the Fed has repeatedly done the wrong thing over the last several years when it comes to policy, so we will have to see on the timing. Regardless of exactly when it happens, the first rate hike and the ones that follow are precisely the kinds of events that can create “Bloody Wednesday” reactions in a wide variety of markets.

Something you absolutely need to understand: The process will occur in stages. Violent currency moves are the first likely consequence of divergent monetary policy paths here and abroad. And sure enough, we’ve already seen a “Swiss Shocker” and a “Canadian Cannonball” created by surprise policy moves in those countries.

Large interest rate fluctuations are another side effect that we’ll see sooner rather than later. Heck, Treasury bond investors just suffered the worst monthly losses in five years after wildly inflated bond prices took a tumble.

For many stocks, we all know that rate hikes are ultimately a kiss of death. Every Fed rate-hiking cycle has led to incredible market turmoil eventually, from the dot-com bust to the housing collapse.

But it takes time — a cumulative buildup of interest rate pressure. Many high-quality stocks in select promising sectors will actually rise early on in a hiking cycle, even as weaker, low-quality ones in certain sectors get hammered.

I believe my many, many years of experience tracking Fed policy and interest rates … as well as Martin’s decades of doing so … help make us uniquely qualified to help you navigate what’s coming. So keep your eyes on Money and Markets for updates as the Fed’s policy path unfolds before us.

In the meantime, let me hear your thoughts on the matter. Do these latest Fed comments suggest to you that a rate hike is coming before long? Why or why not? And regardless of what the Fed is doing, what do you think they should be doing? How are you adjusting your investing strategy in light of the unfolding policy outlook, if at all?

The link to the Money and Markets website can be found right here. Let me (and Janet Yellen!) hear what you have to say!

Our Readers Speak

Walt Disney’s (DIS, Weiss Ratings: A) triple-digit ticket gambit was the topic at hand yesterday, and you had a lot of thoughts about why the entertainment giant made its move — and what it means more broadly for the economy.

Reader J.R.J. said he thinks Disney’s move is just a harbinger of what the economy overall is likely to see …

“2) Wal-Mart, the nation’s largest employer, is raising wages. These moves will force competitors to raise wages to keep/obtain employees.

“3) Recent strikes at West coast ports and oil refineries may mean that union power has bottomed and is on the way up. That would make sense since government reports much higher employment and a tightening labor market.

“The Fed will likely accommodate these wage increases by supplying more fiat currency to allow people to pay the higher prices coming from higher wages, Obamacare and likely higher commodities. So my conclusion: GOT GOLD?”

Reader Louise C. concurs on inflation, adding that many families may find themselves priced out by Disney’s move: “Of course inflation is rampant in all phases of the market, and Disney is no different. However, $105-per-admission is going to rule out a lot of families with several children, and that’s sad because Mickey Mouse and his buddies are what healthy fantasy is made of.”

Reader Ray K. picked up on that train of thought, too, saying: “They really are starting to stretch the ‘limit’ that people can afford. I have a daughter who lives in Florida. She has had an annual pass for a long time. She is switching to Universal … just more affordable. She is a real Disney lover, too.

“My wife and I bought a 10-pass ticket a couple years ago, which was a good deal. The passes were a one-day park hopper with no expiration date. Say goodbye to those deals, too. They will no longer be offering tickets with no expiration date. Even though our daughter lives close to WDW, we will likely not go as often after our present passes are used. Just too expensive.”

And of course, Disney won’t win any new converts among the sizable crowd of people who don’t like to deal with theme park problems (long lines, expensive meals and parking, etc.) in general. As Reader Bill S. said:

“Disney just continues to milk the public every chance they get. But as long as they can get people to stand in line for two hours for one ride, it won’t change. Take a look at the salaries of some of the executives and you don’t need to know anything more. It is obscene. Just one more reason not to live in Florida.”

Haha! Well, I wouldn’t go as far as Bill. We have plenty of free, crowd-less benefits to enjoy as well. I bike or run in the beautiful weather at least three or four times a week … enjoy the neighborhood pool many, many times per year … and BBQ on the back porch even in the depths of December!

But I do know that theme park crowds — and theme park prices, especially now — aren’t for everyone. The lack of a need to factor airfare in makes a big difference for my family though … just like it does with one of our other favorite kinds of vacation — cruising!

If you’d like to add to the discussion, don’t forget: It’s as easy as clicking here and typing out your comments.

Other Developments of the Day

Home Depot (HD, Weiss Ratings: A) continues to tack on points, this time after announcing strong quarterly profit and an $18 billion stock buyback program. The home improvement retailer earned $1 per share excluding items, besting the average estimate of 89 cents. Same-store sales rose a healthy 7.9 percent in the fourth quarter that ended Feb. 1.

Are you @R$@%*@ kidding me? Now, the Justice Department is investigating ten mega-banks from the U.S. and Europe over manipulation of the precious metals markets.

Greece has fallen back into line, and the European Commission is pleased. The pan-European group called Greece’s proposed economic reforms “sufficiently comprehensive” — ensuring that Greece will get another four months of debt relief. Then we get to go through this whole farce again. Oh joy!

Russian President Vladimir Putin took to the airwaves to talk about Ukraine, Crimea and more. While he warned that a full-on war with Ukraine would be “apocalyptic,” he said he doesn’t see one as likely in the wake of the Minsk cease-fire deal.

At the same time, he basically said he would never give Crimea back. So we might as well start redrawing those maps unless Europe and the U.S. do more than issue mealy-mouthed protests … which they won’t.

Oil prices are treading water around the $50 a barrel mark — and Nigeria isn’t happy. The country’s oil minister said OPEC members are talking behind the scenes about holding an emergency meeting sometime in the next six weeks.

The 12-nation group could vote to cut production, but only if the biggest player — Saudi Arabia — agrees to go along. No official word yet out of the kingdom or other OPEC members in its backyard.

Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.

{42 comments }

tommrTuesday, February 24, 2015 at 5:36 pm

I have contended for many years that the Federal Reserve does NOT set interest rates, with the possible exception of extremely short term rates, it generally follows the rates set by the MARKETS! So if the markets push rates up now the Fed will follow suit and adjust its’ targets to conform!!

G. PaulTuesday, February 24, 2015 at 5:37 pm

Interest rate policy can be seen from two points of view.
1. To not suppress rates artificially and let the market set the rate.
2. As a tool of economic warfare.
Either policy can be used for benefit, given that one is better or worse off relative to other economies. And we seem to be in an economic war, with most trying to import inflation by weakening their currencies.

If used as a tool of warfare, it will weaken a lot of economies around the world, since a lot of countries owe their debt in dollar terms.
Question is what are FED’s aims, which policy it is pursuing?

H. Richard PennTuesday, February 24, 2015 at 5:39 pm

So, can I breathe easy a while longer because April 29, 2015 no longer is the date “the America we know and love will be no more” and “horrific for the unprepared”?

tommrTuesday, February 24, 2015 at 5:42 pm

Oh, and I failled to mention that, since wage pressures are starting to take hold, the markets WILL BE raising interest rates very soon!! The Fed WILL follow suit.

StevenTuesday, February 24, 2015 at 5:47 pm

as for the Fed’s influence upon the economy, it’s all over except for the Yellen.

HankTuesday, February 24, 2015 at 5:50 pm

I don’t believe anyone in the finance or money business (in the federal entity) knows beans about how our economy is or is not doing.

The hidden inflation – property taxes. Property taxes are what will eventually kill the housing market, particularly in Texas. Case in point – just saw a nice middle / upper-middle class home come on the market here in DFW. Price $284,000. Mortgage would run $1055 a month. However, the property taxes are $7200 a year, or $600 / month, nearly 60% of the mortgage cost. Even when the mortgage is paid off, that tax will still be there, and still be going up (not to mention the homeowner’s insurance). It’s like that throughout Texas, which is why I’ll be selling and moving out of state soon. Would like to get a different house, but having the house appraised value set to the sales price here in TX will kill you with the taxes. As an example – a $150K appraised house here has $3500 property taxes yearly (2.3%). Nick Sabin’s $3M mansion in Tuscaloosa, AL, which just changed hands and so is appraised at that price, has taxes of only $10,000 (.33%). So TX taxes are about 8 times higher than Alabama’s. Sure, TX has no state income tax, but it’s a lot easier (especially for retirees) to mess with their income than with their property appraisal. How many people here will want to move up in their homes, if their taxes will double or triple for a lateral move, and have to pay another 60-75% on top of their mortgage payment?

DavidTuesday, February 24, 2015 at 7:26 pm

In your example the mortgage cost plus property taxes are $1055 + $600 = $1655 a month. Let’s also say that to qualify for the house you describe you need an annual income of $50,000 (total debt of $2000/mo, including the house), which is a pretty high debt to equity ratio of 48%–you’d be living lean. You might be able to move to Alabama and get cheaper housing, but good luck finding a job that pays the same as one in Texas. And good luck finding a place to move to where you can earn that kind of money and get a comparable house for less than $1655 a month. Your problem is that you’re paying too much in taxes, it’s that you don’t earn enough, just like most of the rest of the middle class.

JimTuesday, February 24, 2015 at 8:27 pm

It’s just as bad here in Louisiana. My $265,000 home sports a $560 a month property tax bill. It wasn’t that long ago that this would have been the total rent. My small office is $350 a month. The assessor has the power to raise it as he sees fit to be sure that their revenues don’t fall in a given year. We also have state income tax. I don’t own my home. The City, Parish, and State owns it and let’s me live in it as long as I pay my “rent”. Jim

DavidTuesday, February 24, 2015 at 7:04 pm

You’ve been critical of the Fed for years now, but the fact is that the US economy is doing better than anywhere else in the world, employment is growing, and the deficit is declining rapidly. Sure, not everything is peaches and cream, particularly middle class incomes, but that problem has been around for decades, not just since the crash. So things are going pretty well despite the Fed doing exactly the opposite of what you would have it do, and inflation hasn’t gone out of control as you and others had been predicting a few years ago. Did you ever think that maybe, just maybe, the Fed deserves a little bit of credit for the US economy doing so well, and that perhaps they really know what they’re doing?

PhilTuesday, February 24, 2015 at 7:23 pm

Exactly, David. All the know-it-alls, including Mike Larson, who wanted the Fed to do the opposite of what they were doing at any given time, have no clue as to what would have happened to the economy had the Fed followed their wishes. But Bernanke, who initiated the policy, had studied the Great Depression carefully, and knew that what the “know-it-alls” wanted was what the Fed did during the 30’s, which totally exacerbated the Depression. Now Mike says “the rationale for crisis-era monetary policy is completely lacking. But the Fed has repeatedly done the wrong thing over the last several years when it comes to policy,…” Oh, really, Mike! That’s why we’re doing so well compared to before. Thank goodness you’re not a member of the Fed, Mike. Because you’ve consistently advocated policies that would have been disastrous. And please kill this “Bloody Wednesday” talk. Avoiding such an event is exactly what the Fed is doing by being so transparent. This is not a Paul Volcker or Alan Greenspan Fed. So stop trying to scare people into buying your service.

JimTuesday, February 24, 2015 at 9:07 pm

The Fed has pursued policies that have had short term positive effects. But, at what price? Their balance sheet is classified information. It’s not scare mongering to think they have created a situation that can only end badly. It’s been one bubble after another starting with Greenspan. The total history of the Fed is one of incompetence and failure and there is no reason to believe it will not continue. The booms and busts of the past that they were supposed to prevent were child’s play compared to what the Fed has given us since their creation. I wonder where we would be now if we had let the markets properly punish those who had it coming in 2008? Jim

BarryTuesday, February 24, 2015 at 7:13 pm

To the point when will the Fed will raise rates: Here you go…. late October 27-28. This is the start. Mike I like it when you are right!! Here it is, What you call “Bloody Wednesday” October 28th… The Time when the Federal Reserve will make their move..

Mike PTuesday, February 24, 2015 at 8:04 pm

Seems a lot of money managers are targeting Sept. for the first rate increase… and it will be not more than 1/4 percent. There should be little blood spilled as the Fed has been telegraphing this for a year now and the increases will be slow and steady given the state of the world economy. The Fed doesn’t want to repeat 1936-1937. My guess is the stock market won’t crash, but just gradually deflate as bond yields on treasuries reach 3.5 percent.

The bigger threat is a stampede into Europe and Asian stock markets. That could cause some real problems for the US market. That’s another reason why the Fed needs to keep interest rates low while the rest of the world catches up to the US.

VernTuesday, February 24, 2015 at 7:14 pm

The interest rates should not have been forced down several years ago. How many seniors have lost all their retirement savings income because of it? The only ones benefiting from low interest rates are the governments with their big deficits and the “too big to fail” financial institutions getting money from the government at 1/4% and trading it on the “too high to fall” stock market getting 2 1/2% for handling paper assets. There aren’t enough real assets to support the inflated price of stocks at their present level. It is like the story of the traveler that stopped at a small town hotel, left a $100 bill on lthe counter as a deposit on a room and went up to look at the room. The hotel keeper took the $100 bill and went to pay the grocer for supplies he bought, the grocer paid $100 to the garage for services to his truck, the mechanic paid the prostitute $100 for services rendered, the prostitute paid her $100 hotel bill, the traveler came down, said he didn’t want the room, picked up the $100 bill and left 5 towns people happy because their debts were paid off. The problem is that us middle class people that are still in that class aren’t getting in on the action, we are providing the $100 bills for others to use, and in most cases we don’t get the $100 bill back.

PhilTuesday, February 24, 2015 at 7:27 pm

No prostitute pays $100 for a hotel room and gets only $100 for her services. Being a prostitute is a profession, and you have to make money to stay in it. Duh.

MarkWWednesday, February 25, 2015 at 10:56 am

Your scenario doesn’t work. The hotel manager wouldn’t be allowed to spend the deposit. But assuming he did, it would take him time to do that. So if it took him an hour to pay his grocery bill, and then the grocer takes an hour to pay his bill, and the mechanic (lets change the prostitute to a mistress) takes an hour at the hotel, that’s three hours that the room the traveler is looking at is unpaid for. So the hotels resources are actually underutilized.

tradewindsTuesday, February 24, 2015 at 7:15 pm

The Fed and the government want inflation … after all, that’s how they rob Main Street. But the K-winter causes them problems along that line because its naturally deflationary. But over the long term prices and interest rates move in the same direction according to “Jackson’s Linkage” (as explained by Antal Fekete – http://professorfekete.com/articles%5CAEFCausesAndConsequencesKondratievs.pdf ).
So they’re finding that by holding interest rates down they can’t get prices to rise. Well then how does one create inflation in that case? I suspect that’s the problem. Also they loaned out $16 trillion dollars a few years ago. What, I wonder, will be the effect of raising rates as regards to the money streams produced by those loans (where the loans were made at low interest rates)? It sounds like somebody will have tremendous capital to make higher interest rate loans with … and I would guess at somebody else’s expense. But at whose expense will it be? Who gets stuck with the dwarfed interest payments on those trillions of dollars of loans? I wonder how that works?

booksTuesday, February 24, 2015 at 7:36 pm

I can only hope for a rate hike. Us retirees are getting hammered year after year with these low rates.

WWW3 is not a joy rideTuesday, February 24, 2015 at 8:01 pm

Gotta like yet another Putin poke, you might want to get a map and a history book regarding Eastern Ukraine and Crimea, and pass up on CNN for a minute. Poking this bear is not like attacking and bombing people in bare feet living in a jungle or goat herders wearing sandals. An analysis of that bear’s nuclear arsenal should give pause to any lucid warmonger at least until the next contrived news release.

DougWednesday, February 25, 2015 at 2:29 am

correct. Putin is not sadam or Gadafi. Russians caused 80 percent of hitlers losses and are standing up against illegal Kiev govt which is destroying wwii memorials and want to eliminate Russian language. Usa is unquestionably incriminated in supporting Kiev coup. So your comments mike give rise to put ins reaction and now as Martin has verified, Russians are anti american(military). about ready to cancel my subscription with one more negative putin comment. sanctions are stupid, hurt Europe, are an act of war, create closer ties with China and trigger demise of petrodollar. pay attention to martins observations on Russia and give putin the respect he deserves in response to american aggression in ukraine. how about Us out of Ukraine. Biden ,his son hunter ,Kerry McCain,Brennan various Us generals. Are we concerned about bringing democracy to ukraine or is Exxon, shell and chevron setting up to frack Ukraine and to bleed Ukranians with loans not to mention 2 percent to fund NATO type defense. Wake up

Paul GTuesday, February 24, 2015 at 8:28 pm

The 25th will not even get a noes bleed, after Larry scared the hell out of them.

Bill MorellTuesday, February 24, 2015 at 8:29 pm

The FED has to start raising the interest rates soon, but at what expense. As you mentioned treasuries and bonds are doing poorly because of the rates being flatlined so long. Let’s suppose they raise the rate 1 point, well bonds would sink by 2 points. That’s right, for every increase in the interest rate drives bonds down by double the rate. Meaning, there will be some adverse reaction from sellers and buyers of bonds. The stock market will most likely react the same and we could be in for a 10-20 percent correction in stocks. The FED mor likely raise interest rates by a quarter of a point and slowly raise these rates over the next 5 years, so that bloody Wednesday does not happen. The market has had a major crash about every 7-8 years, and making more dollars has seemed to bring on market recovery in 5-6 years because of that reaction. The problem is the market never had a real correction and both the stocks and dollar are both overvalued. The thing that worries stockholders is an overnight or over weekend crash like the one in 2009.

Robert CalabroTuesday, February 24, 2015 at 8:34 pm

Mike: I do not think that the Fed will raise rates this year. We are in our third currency war which we started in 2010. In his State of the union message the President set a goal of doubling exports in five years. Every central banker who listened that night knew that we would devalue. The rise in the dollar is due to capital inflows from Europe and the rest of the world. If interest rates were raised, it would make our exports more expensive abroad then what they already are. We are on the path of self destruction. In his book, ” The theory of the business cycle, the father of The Austrian school of economics, Van Mises said;” When countries start the process of currency devaluation, they sow the seeds of their own destruction” It is time to return to the classical gold standard, which was what our founding fathers wanted for us. Regards, Robert Calabro.

Chuck BurtonTuesday, February 24, 2015 at 9:32 pm

If interest rates are low, isn’t it because the economy is relatively weak and the money supply is high? If the Fed artificially raises interest rates, won’t that just weaken the economy more, and profit those who hold the money supply, that is the banks which are the controllers of the Fed? That is, provided they can loan that money out at a higher rate – which might not be so easy with a weak economy. More expensive loans might just kill any nascent growth trend too.

Chuck BurtonTuesday, February 24, 2015 at 9:38 pm

Addendum: Higher rates are associated with riskier investments. Is that what we want for our loans?

JimTuesday, February 24, 2015 at 10:13 pm

Re: Experts. The experts at the Fed have devalued our currency by 95 per cent. The experts at the State Dept. have given us one bloody foreign war after another, the 100,000 experts at DHS haven’t managed to catch a single terrorist, the experts at HHS gave us
Obamacare, the experts at Education have trashed our schools, experts at DOE have yet to find a single barrel of oil, the experts on Wall St. lose our savings and investments for us. The experts surrounding our expert President have had no real world experience of any kind. Congress is filled with experts. Why do we listen to anything any expert has to tell us anymore. It’s time to send in the second team. We are much more likely to encounter honest opinions and sage advice here at the Money and Markets web site as any place else I can think of. The key is to listen to what others have to say and then think for yourself! Jim

LanceTuesday, February 24, 2015 at 10:15 pm

“.., I think there are some reasons why I believe that Janet Yellen will be reluctant to raise short-term rates. Were the Federal Reserve to raise rates, Janet Yellen would be asked in her periodic testimony to congress something similar to the following question: Is it true that the purpose of the Federal Reserve raising interest rates was to reduce the number of people in the USA with jobs and in that way suppress the growth in wages?
Only if a raging wage-price spiral was in full force would she be totally comfortable answering that question. I think Janet Yellen’s greatest fear is being responsible for another 1937. Most agree that the premature Federal Reserve tightening in 1937 worsened the depression. A more speculative theory related to the fear of another 1937 could be related to the fact that Janet Yellen is the first female Chair of the Board of Governors. In one of her nightmares, not only is she blamed for the economy tanking as a result of her raising short-term rates, but people using unfairly using that as an argument against electing Hillary Clinton as the first female president..”http://seekingalpha.com/article/2942256

PhilTuesday, February 24, 2015 at 11:34 pm

It isn’t that Yellen is a woman. It’s that she’s an economist. She and Bernanke fully understand the Fed disaster of 1937, and neither wants to reproduce it.

Sarah BeamonTuesday, February 24, 2015 at 10:38 pm

Perhaps you might further explain to all your readers how an interest rate increase by the fed will also increase the cost of our fed debt. Why would we want to increase the “cost of our US debt” with increased interest rates? Perhaps you should also explain why you approve of an increase in fed interest rate, which will cause the stock market to crash. I understand that hastening the inevitable, will also hasten the opportunity date for the US to reinvent itself. Quantitative Easement was not the answer in slowing down the inevitable. It never is, but every country is into QE, and theirs makes the US QE look like a wadding pool! There must be an equilibrium in reducing our debt, perhaps 1 cent of every dollar applied in reducing our debt over the next 10 years. I feel this would go far in reducing the pain our country is currently suffering – Debt reduction and reduction in spending over the next 10 years I feel is a must compared to the alternatives of crashing our economy in order to reinvent the US, as is forecasted in the approved way of “Money and the Market theories

DougTuesday, February 24, 2015 at 10:52 pm

What happens to Life Insurance policies when other countries stop wanting our dollars or a bubble bursts, or a black swan arrives?

herbTuesday, February 24, 2015 at 10:53 pm

That woman sounded like she had a mouth full of pudding and had very little idea of what she is doing. She does not instill any comfort from what she says and I believe she does not have a clue. All I can deduce from what she said is that we can expect zero interest rates for eternity.

MikeTuesday, February 24, 2015 at 11:08 pm

Enjoyed a recent ride and time to move to cash until the markets absorb the non-action. Oversupply indicates deflation and slower growth this year. The US might be the least dirty shirt in the bag, but lower demand and high export prices will be a factor.

Lawrence GrecoTuesday, February 24, 2015 at 11:17 pm

The 18.1 trillion dollar deficit will take 3000 years to flatten to zero. Currency cannot keep up with population growth and deteriorated infrastructure obligations.Washington gridlock prevents GDP from increasing 1% more. Politicians are careerists whi have no heart to function collectively. Interest rate raised will still be a squester problem.

OSCARWednesday, February 25, 2015 at 12:04 am

Next year, Janet will make her move.

RUSS SMITHWednesday, February 25, 2015 at 2:13 am

Hi!, Patrons Of Money & Markets Et. Al.:

Earlier, Mr. Larson proposed that the FED. would raise rates by the end of this month but now he’s out there at the end of April and so how do investors navigate against this backdrop of skewed expectations? Larry Edelson thought the stock market would reach 31,000+ by 2016 earlier but now proposes that it will happen in 2017 a year later. How dependable is that to those who depend upon accurate, timely information? As Thomas Edison once said: “Not one person on this planet knows even 1 millionth of one percent about anything!” We just like to think we know something sometimes but the bottom line according to Mr. Edison is that too much is unknowable for anyone’s prognostications to be accurate any time in their life time!! If we could accurately foretell history, we wouldn’t need any newspapers or newsletters explaining what just happened in our lives would we? We could just take a little time once in awhile to consult OUR crystal balls and know it all in a glance but no chance in my humble opinion!!

As a real estate investor, I’ve been reluctant to enter into any new deals because it’s so obvious that eventually the feds will raise rates. No bank will give a loan based on a solid interest rate any more; they all want a three year balloon with a refi to a new interest rate. Makes investing in real estate a little spooky. While I appreciate the low rates to some extent, I almost wish the shoe would drop so we could get it over with.

DANIEL JOHNSONWednesday, February 25, 2015 at 1:21 pm

with the banks enjoying minimal cost of deposited funds and the treasury being able to borrow cheaply we will not see much of an interest increase for the next 30 years . the nation would go bankrupt with high interest rates in view of our national debt .

FreemanThursday, February 26, 2015 at 5:12 pm

Congress call the Fed “political” is )Q_#*R# pot calling kettle black. I have a Tshirt for Janet Yellen to wear the next time she testifies in Congress. “What the Fed?!?”

JeanSaturday, February 28, 2015 at 9:22 pm

I agree that this country is too bankrupt with debt to be able to pay a higher rate on govt debt, and the populace is too bankrupt to pay the higher taxes to accommodate higher rates, particularly after the hike in Medical Insurance from Obama-care, the excessive inflation in food prices, education, rents, home prices, etc.. yet somehow there’s no inflation visible to the Fed. I’m totally fed up with listening to the bogus government numbers on employment, GDP and inflation. Eventually the truth will be known, it will all collapse in time!

Dennis WellsTuesday, March 17, 2015 at 10:56 pm

Like some investors I have been looking for dividends and yields. Last quarter of 2014 I purchased 3 BDC’s. Medley capitol MCC, Prospect Capitol ,PSES, and TCP Capitol, TCPC. They have all lost share value. My question to you Mike is this FED interest rate hike going to hurt these BDC investments. I know you cannot give individual advise however is this the type of investments I should be avoiding.